Health care sector in India has seen a steady progress since the past few years both in terms of investments i.e. private sector / public sector including domestic and foreign investors and also been increasing its percentage contribution to the GDP. Given the demographic situation of India and peculiar diversity both in terms of rural and urban population including the rising income and access to healthcare has in a way made this country an attractive market for investors in this space. Health care would include hospitals, medical equipment, outsourcing, clinical trials, research and development etc. While on one hand the sector has been moving up north in terms of increased market share what has also acted as a catalyst is the liberalised policy both in terms of foreign direct investments and the increased attention from the centre especially towards rural healthcare.
The sector has also experienced an increase in the strategic M&A activity and given the increased business opportunities in this sector one would also expect a change in the way one would deal with disagreements and conflict that could arise in the commercial world. Business community has time and again expressed a need and a desire to operate in a business environment which is conducive to growth with less compliance and control and certainty in the fiscal and regulatory environment. Every business would see a cycle wherein conflict or disputes do arise and taking a party to court could turn out to be a long drawn battle with significant costs.
While an answer to the aforesaid i.e settling disputes could be referring the matter to mediation instead of the usual court process cause given that the Health care sector is quite diverse which includes manufacturing, research activity and services i.e. medical equipment manufacturers, medical services, clinical trials and hospitals and most of the issues that could arise would be very much around the commercial aspects including and not limited to subjectivity in the services sector.
Let’s address the manufacturing space that would cut across all the activities attached to the health care sector. Clearly this sector has a lot of Small and Medium enterprises manufacturing products and supplying to the large pharma players and or / hospitals. Given that the level of investments in this segment is not very substantial given the size of the players the last thing one would expect is to spend money not on opportunities but on case lined up in courts with no result in sight. One could consider setting up of mediation centres specifically for this segment given given that medical care overall is one of the basic need and hence should be affordable if not freely provided and the players with limited investments do need the support in terms of a less complicated and faster way to resolve disputes if any.Given this objective and like any other business enterprise every player would like to keep the costs to the minimum without compromising on the quality. Where costs are of importance and the same when we are dealing with human life clearly Mediation is and could be a great tool to settle disputes that could arise in while we deal with medical equipment’s being supplied to large pharma players or the hospitals including and not limited to Government hospitals.
While one would also state that when it comes to health care where is the question of dispute however practically given the various stages involved in the entire economic cycle of human care when it comes to a conflict or a dispute and the time involved, mediation seems to be the better answer to tackle issues relating to the manufacturing space within the health care sector. At the same time one cannot ignore the diversity in our population basically the rural / urban split and if one were to look at setting up mediation centres with a panel of experts including retired doctors or people from the medical profession who have spent their years of practice in private sector one should get an insight into the current issues that are being faced and of course with an object to resolve and settle the issues.
Services including hospitals is one other area given the sensitivity of the nature of service and human life being involved on the other end (of course does not include criminal cases) mediation is definitely an avenue that should be explored to settle the disputes if any. Medical negligence or error of judgement is another aspect which is a common issue in a dispute if acknowledged in open court can lead to repercussions including cancellation of the licence for the medical practioner.
India is a land full of opportunities for players in the medical devices industry. The country has also become one of the leading destinations for high end diagnostic services with tremendous capital investment for advanced diagnostic facilities thus catering to a greater proportion of population.
Having stated that the point being driven is that areas which concern human health and services related to that including ancillary services are always sensitive and given the probability of issues being very subjective it is always better to provide for an alternate dispute resolution. One also keep in mind the fact that an early resolution to these disputes which are mostly driven around facts given the nature of services and the goods again which would be related to health care would always help achieve the objective of certainty in the minds of business and in fact will act as a check on the parties since one of the tactic is also the fact that given the long drawn litigation environment involved people who commit the mistake are really not averse to filing of cases since they know justice in this country takes forever cause Time is money but life is priceless.
ABOUT THE AUTHOR
Rajeshree Sabnavis has successfully completed the IICA 40 hours training program on commercial mediation and negotiation. She is the founder of Rajeshree Sabnavis & Associates and specializes in tax advisory and transaction tax matters and has over 20 years of experience in advising clients on their cross border acquisitions and implementing the India business strategy for multinationals. She has also advised multinationals including Fortune 500 companies in the areas of tax and transfer pricing, and has assisted large Indian Companies in implementing their transfer pricing across jurisdictions in the ITES sector. She has worked with some of the larger portfolio investors investing in India including some of the large Institutional investors in managing their tax compliance and litigation in India.
Rajeshree is part of the Direct Taxation Committee with the Bombay Chamber of Commerce where she is a Co-Chairperson. In this capacity, she has represented India business Houses and Multinationals on various tax issues before the Central Board of Direct Taxes. She is also a certified IICA Mediator. Rajeshree is a qualified Chartered Accountant and a Company Secretary.